Cheers Marc & Millsy

Boy, you guys reply fast!

To clarify a few things:
1. I realise Premiere (Pro) does loads more than I need and will ever use - e.g, can't ever see myself chroma-keying, using mattes, fancy transitions, etc etc - but (a) version 6 came preloaded with my PC anyway and (b) my main concern was for stability, reliability and compatibility - I've read too many message boards concerning problems with Pinnacle at el and incompatibilities between drivers, mobos, goodness knows what else and I just wanted something I knew would work time and time again. Plus I like getting to grips with a complex product and becoming fluent in it - I'd just get bored with something noddy.
2. My spec is P4 3Ghz, 1Gb Ram, 2Gb page file, 2 x 160HDD (1 for XP, swap file, programs and archive stuff; the other for video footage). Brand new (Sony) PC. Surely this is good enough to whiz through transcoding a 5 minute video? So why didn't it?
3. I don't understand the comments about what Premiere "natively" supports and what it doesn't. Since I can open the MPG captured files, trim them frame by frame and manipulate them like any other files, doesn't this mean their natively supported? Based on your feedback it seems like there is no point in me converting/reconverting these files -the quality I get is as good as I'll get so I have to decide if I can live with it or not?
4. Sorry if I misled you about the SteadyMove thing - my concerns with whether my clips were filling the whole of my TV screen, and whether they were cropped in the process, was to do with the pixel ratio adjustment not SteadyMove. Again, based on Marc's comments, sounds like I'm not necessarily doing anything wrong with my pixel adjustments - just that such adjustments are imperfect. Doesn't answer the question of "Why doesn't Premiere do this automatically when I check the adjust box in the project setting window" though does it?
5. Marc - I won't ever be creating output for a PC monitor - or if I do, it will be much reduced and compressed in order to be e-mailed so all I care about is the file size rather than what it looks like! My primary focus is on creating DVDs of family events, etc so I will always want to view this 640x480 footage on my TV screen. What would it look like on my telly if I did the whole project as 640x480?
6. Back to SteadyMove though - why doesn't the stabilising effect render in my monitor window (is this why you say the file format's not natively supported?) but it does when I export the timelined sequence to AVI?

What I'm going to try over the next day or so is to make one DVD with 3 chapters on it, each 5 minutes long:
Chap1 - rough-cut footage of analog footage captured on my PC
Chap2 - rough-cut footage of MPG 640x480 adjusted to PAL
Chap3 - rough-cut footage of DV/PAL material

I have already seen big differences in quality between 1 & 3 - but there's not much I can do if the source material is only available in 8mm analog format. What I am interested in is the difference between 1 & 2 because, to be quite honest, if the footage from my little Sony is better than analog-converted-to-DV, and doesn't give you a headache from camera shake, it could be a major addition to my source of material. What I have in mind is creating a DVD for each year containing family events and using combinations of DV footage, Sony "still" footage and still snapshots to form an overall montage for the year. As long as the Sony footage is watchable in this kind of context (ie, there is less of this material than there is of the DV footage) I think it'll be okay.

Thanks again for the responses so far

mrsafety